It is often said by many that the work of Adam smith and Karl Marx are
key figures that helps us understand the relationship between entrepreneurs and
workers. In this assignment, I will be discussing how labour power is produced
and by whom, given two remarkable well-known economist Adam smith and political
theorist Karl Marx, I will be using and applying their philosophy as well as
theoretical position of labour power to hopefully come to a stand-still
conclusion on the on-going argument of who produces value, the entrepreneur or
the worker and the relationship between the two.
There are many different theories and concepts about how labour is
produced. Under capitalism Marx insists that “the
capitalist or (employer)buys their labour with money. The employer sells
him their labour for a wage, however the reality is that they sell to the capitalist for money is their labour power.
Labour power is a commodity in this sense. Many have wondered why Marx tries to differentiate labour power
from labour, itself. In fact, the difference between labour power and
labour seems to be important in his argument. By understanding the difference
between the two, Marx is able to explain the concept of producing labour,
and exploitation. this distinction also enables Marx to explain how the worker receives
less than the
value of what he produces.
exists in any society. It’s a critical concept used
by Marx in his critique of capitalism (much favoured by Smith).
Simply understanding what labour power is and how it is somewhat different from
labour itself would be the first step in finding an answer to the given
question. According to
Marx there is a clear distinction between the two. Labour-power has been described
as one’s capacity to work. Labour itself
on the other hand, is the physical act of working itself.
sense is a commodity and is an object of possession. It can be traded in any
market, bought and
even sold. Under capitalism, the hiring of labour power involves a substantial
agreement from the worker to sell his or her labour-power to the capitalist, in
exchange for a wage for a given period of time (however long the employ wants
to be employed). Marx detailed this in his book (Das capital 1867), stating
“The labour-power is a commodity, not capital, in the hands of the
labourer, and it constitutes for him a revenue so long as he can continuously
repeat its sale; it functions as capital after its sale, in
the hands of the capitalist, during the process of production itself”. This leads us to ask
the question why would anybody sell their commodity? well they do it to live.
The active work I.e. the labour that the individual produces is a mere
expression of the labourers own life. And with this life activity he will sell
it to the capitalist i.e. the employer to be able to obtain the necessary
things in life according to that individual. Therefore, it is a means of
“securing his own existence” where he or she works to live rather than live to
work. if an individual doesn’t sell his commodity, he is unemployed and will
struggle in the current world we live in. This is the sacrifice one would have
in a period where the worker is producing actual labour, the
employer(capitalist) can sell these goods or services and obtain a profit;
since the wages paid to the workers are lower than the value of the goods or
services they produce for the capitalist. The exchange value commodity
estimated in money is the price or cost. Wages therefore are only a special
name for the price of labour-power, wages therefore, are not a share of the
worker in the commodities produced by himself or herself.
to (Marx’s Das Capital 1867) which states “the labourer is not a capitalist, although he brings a commodity to
market, namely his own skin’.it would be ideal to make the argument that labour
power is solely produced by the worker who will sought to hire out themselves and
give up his or hers life-activity,
of which they sell for a wage in order to survive.
As this exchange takes place at a certain ratio that is clearly not equal, it
makes sense that workers are exploited in this sense as under capitalism,
employers are only concerned about generating a high profit margin.
Under Marx’s philosophy, he believed that human
beings by nature are naturally creative, productive creatures who have the
ability to change the world through production. However, Marx has expressed his
criticism with the way that market economy is structured under capitalism and
how this hinders/blocks our ability to let self-interest be the driving force
of creating wealth.
The understanding of who produces labour power,
will sort to make a case as to who creates and produces value. This is often referred
as the labour theory of value. The Labour Theory of
Value is a theory to explain how the working class are exploited under
capitalism. Marxism suggest that the worker is the one that adds
value to a product but is heavily exploited against to the point where the
worker wouldn’t and doesn’t recognise it.